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18 May 2010

Nestle considers resuming ties with Indonesia palm oil firm

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Food giant Nestle will resume buying palm oil from Indonesian giant Sinar Mas if an independent audit clears the Jakarta-based firm of claims it is devastating rainforest, AFP quoted a Nestle official as saying Monday.

The world's largest food company dropped Sinar Mas -- Indonesia's biggest palm oil firm -- as a supplier in March following protests by environmental group Greenpeace, after Anglo-Dutch company Unilever also severed ties this year.

Jose Lopez, Nestle S.A's executive vice president, said the Swiss company would "take the right decision" after an ongoing independent audit due for completion by the end of next month.

"Of course, I have nothing against the company or anybody else," he said when asked whether Nestle will resume buying palm oil from Sinar Mas.

"If, as you say, it's all baseless, then why should I have any decision against," Lopez told reporters during a sustainable palm oil forum in Malaysia's capital.

Palm oil, which is used extensively as biofuel and for making processed food and toiletries, has been vilified by environmentalists for causing deforestation and threatening species such as orangutans and rhinos.

Indonesia and Malaysia are the world's top two palm oil exporters and account for 85 percent of global production.

Lopez said Nestle had entered a partnership with non-profit group The Forest Trust (TFT) and others to identify and exclude high risk plantations or farms linked to deforestation. He said this signalled Nestle's "strong commitment to ending deforestation of rainforests".

The head of communications for Sinar Mas Agro Resources and Technology (SMART), Fajar Reksoprodjo, voiced said the company "appreciates" Nestle's stance.

"We urge our other stakeholders to wait for the completion of the independent verification so as to make an informed decision based on facts," he added.

A Greenpeace official for forest conservation in Southeast Asia, Bustar Maitar, voiced disappointment and called for the audit to be transparent and independent.

"Nestle shouldn't wait for the audit results before making a decision. We're disappointed because the longer the wait, more forest will be destroyed," he said.

Sinar Mas has announced the suspension of a plantation manager in relation to a case cited by Greenpeace in West Kalimantan.

Apart from Nestle and Unilever, US food company Cargill has also demanded answers from Sinar Mas about claims it is devastating forests.


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